According to Bloomberg
Currently, on the cryptocurrency options exchange Deribit, the open interest for Bitcoin call options with an expiration date of June 27 and a strike price of up to $300,000 ranks second, only behind options contracts with a strike price of $110,000.
(Background summary: Quick news: Bitcoin breaks historical high, OKX spot reaches $109,457! The cryptocurrency market is down 0.2%)
(Additional background: Standard Chartered: Institutions are aggressively buying MicroStrategy (MSTR) to position themselves in Bitcoin, projecting BTC to reach $500,000 by 2029)
Why are people buying such “sky-high” options?
The target price of $300,000 means Bitcoin would need to surge 270% within a month. To be honest, the probability is not high, but it reflects several strategies:
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Extreme bullish bets (casino mentality)
This type of option might only cost a few tens or hundreds of dollars, but if Bitcoin really skyrockets (for example, due to rampant ETF buying, a collapse in confidence in the dollar, or massive capital migration), the rewards could be thousands of times: “I know it won’t happen, but I’m willing to bet on it just in case.”
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Leveraged positioning (market sentiment radar)
This can also be seen as a signal of “extreme greed” in the market. The emergence of such out-of-the-money options trading indicates that some players believe Bitcoin has significant room for short-term growth, which could be a phenomenon that appears at the end of a bull market.
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Hedging or long position hedging
Some institutions may hold substantial long positions in the spot or other derivatives markets and will buy some deep out-of-the-money options as “tail hedges.” Similar to: “If Bitcoin really surges, this lottery ticket will compensate for other missed opportunity costs.”
Strong bullish sentiment in the market, is there an overheating signal?
Regarding this phenomenon, Jeffrey Howard, North America Head of Cryptocurrency Brokerage Nonco, commented:
“The price structure of the Bitcoin options market across different maturities still shows a clear bullish inclination, with the prices of far out-of-the-money call options significantly higher than similar put options, indicating that the market generally expects Bitcoin to continue rising.”
At the same time, Ravi Doshi, Head of Markets at FalconX, pointed out that as Bitcoin’s price approaches historical highs, investor interest in potential upside has reignited, leading to active positioning for possible gains.
However, the activity of these extremely out-of-the-money options may also signal speculative overheating. While it does not mean the market will peak immediately, there is a high possibility that investment sentiment has entered a frenzied stage, which could lead to increased price volatility.
Potential for gamma squeeze emergence
Additionally, it is worth noting that the recent surge in short-term options trading with concentrated strike prices may lay the groundwork for a so-called “gamma squeeze.” When a large number of call options are purchased, option sellers (such as market makers) often need to buy underlying assets or contract positions to hedge their risks, which may push up market prices and accelerate price increases.
Greg Magadini, Head of Derivatives at Amberdata, pointed out that from Deribit’s Bitcoin positions, many market makers have significant negative gamma exposure at the $110,000 level, indicating that they may be forced to engage in passive buying when prices rise, further boosting market momentum.
Market predictions show slight caution
Although the market remains generally optimistic about Bitcoin’s performance this year, specific price forecasts appear somewhat more cautious. According to the prediction platform Polymarket, the market seems to be slightly hesitant regarding the final price Bitcoin might reach this year.
According to the latest data from Polymarket, the market’s bets regarding what price Bitcoin can ultimately reach this year are as follows:
- $1,000,000: 3%
- $250,000: 10%
- $200,000: 17%
- $150,000: 40%
- $130,000: 63%
- $120,000: 75%
- $110,000: 93%
- $70,000: 29%
- $50,000: 14%
- $20,000: 4%
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